Eric Ries on the Hard Things about Early-Stage Entrepreneurship
3 min readJun 10, 2019
- When we build startups, we shouldn’t use astrology to build them. The Lean Startup Methodology is my attempt to combine science and statistics, encouraging founders to use carefully designed experiments to test their reality-bending ideas and pivot to a new strategy if those don’t work.
- Pivot is a change in strategy without a change in vision. How do you know whether to pivot? We all aspire for hockey stick growth — what makes the hockey stick happen is the long flat line. There have been times when I’ve felt so betrayed because we stayed in the flat part, and the hockey stick lift never came. Ask yourself: why is this thing supposed to hockey stick? What’s the causal thing that’ll make it hockey stick?
- The hardest thing about entrepreneurship is actually getting you and your cofounders to agree on the facts. If you agree on the facts, the ideas of how to solve problems are usually obvious. It’s challenging to be disciplined and get everyone to agree on the same facts — is our current strategy going to get us where want to be?
- The best part of startups is between fundraising and launch — no customers to bother you. You and your co-founders are just arguing about technical stuff. You get a couple of customers after launch then and wonder about whether you’ve got Product-Market Fit. People with PMF have no time to ask that question — they’re too inundated with demand. No need to call me, or anyone else — if you have PMF, you’ll know with 100% clarity.
- Most founders ask about whether pivots should involve changing features or technologies (“we should’ve used React!” or “why did we use React?!”). The problem is usually about customer acquisition — deeply understanding who is your customer and what does your website say the product is for. We once built a product that was designed for stay-at-home Moms with discretionary income. After launch, we realized that most of our users were teenagers with no discretionary income. I remember hopping on customer chat and feeling flustered talking to the teenagers because I felt they were “clogging up the pipeline” and preventing me from talking to my “target customer.” That’s when I realized we had to pivot the product or learn to serve teenagers.
- You don’t get partial credit in entrepreneurship; you either get 10/10 or you die. If you live, you’ll exponentially move up.
- Fundraising could actually be detrimental. When I read a TechCrunch article about a startup that raised a $50M seed round, I immediately say ‘yep, they’re dead.’ It’s not raising the money that’s the problem — it’s about what that amount of money does to the company’s decision-making process. They think they don’t need to be lean anymore since they have so much money. Any money spent on customer validation is good money spent, most of everything else is a waste. Cut wasteful spending in good times.
- (On building Long-term Stock Exchange) “We need more investors focused on the long-term vision of a company. I’m building LTSE because people want to invest in long-term philosophy for great companies that change the world. There is a new generation of companies that are doing good for the world. If something like LTSE exists, companies will start going public sooner, and avoid the problems of staying private too long — both for employees but also the general public.
- I couldn’t have built LTSE at any other point in my life —it would’ve killed me. Building this requires all of the skills and experiences that I’ve gained so far.
